Alphabet declines amid $80 billion share issuance and AI investments

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Alphabet declines amid $80 billion share issuance

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Anton Kharitonov

1 hour ago

Alphabet declines amid $80 billion share issuance and AI investments — Google

Google’s parent company, Alphabet, has announced plans to raise $80 billion through equity offerings to expand its artificial intelligence infrastructure. The package includes a $30 billion public offering, a $10 billion private placement with Berkshire Hathaway, and an at-the-market share sale program of up to $40 billion during the third quarter of 2026.

Investors reacted negatively to the announcement. The stock closed 1% lower on June 1 at $372.60 and continued to decline by nearly 3% in premarket trading. As of June 4, 2026, Alphabet shares are trading at $357.94, down 1.08% on the day.

Reason for the decline: buyback cancellation and shareholder dilution concerns

The market interpreted the share issuance as an effective cancellation of Alphabet’s stock buyback program and a source of potential dilution for existing shareholders. Alphabet explained the decision by citing “unprecedented demand” for AI solutions from both enterprises and consumers, which currently exceeds the company’s infrastructure capacity.

In 2026, Alphabet, together with Microsoft, Meta, and Amazon, is expected to invest more than $700 billion in capital expenditures, while total AI-related spending could exceed $1 trillion by 2027.

Google I/O 2026: Gemini 3.5 and AI agents in Search

At the Google I/O 2026 conference in May, the company unveiled the Gemini 3.5 family of models. The lightweight Flash version is already integrated into Google Search and the Gemini app, while the more powerful Pro version is expected to launch in June.

Google Search received its most significant update in 25 years, with AI agents now integrated directly into the search experience, allowing users to interact with agents simply by asking questions.

For e-commerce, Google introduced Universal Cart, a unified shopping cart featuring AI-powered discount discovery and price-history tracking. The company also announced changes to its AI subscription offerings, reducing the price of AI Ultra from $250 to $200 per month and introducing a new $100 plan with five times higher usage limits.

Legal risks: U.S. antitrust case

Google remains under pressure from an ongoing U.S. antitrust case. In August 2024, a federal court officially ruled that the company held a monopoly position in online search and advertising markets.

A final decision on potential remedies—including the possibility of breaking up the company into several separate entities—is expected during 2025–2026 following the appeals process. Alphabet has stated that it intends to appeal the district court’s ruling.

The current decline in Alphabet shares reflects a combination of factors: concerns about shareholder dilution from the $80 billion equity issuance, elevated AI-related capital expenditures with no guarantee of near-term returns, and ongoing legal risks in the United States.

Near-term outlook

The current decline in GOOGL appears to be supported near the $360 level, from which a rebound toward the $375–390 range remains possible. While selling into rallies may offer short-term opportunities, buying on weakness remains the preferred strategy, as previously discussed in Alphabet under pressure as investors question price of AI leadership.

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